Lack of Power Plants Hampers Smelter Development

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  • A worker processes nickel at a nickel smelter near Sorowako, Indonesia's Sulawesi island, in this January 8, 2014. REUTERS/Yusuf Ahmad

    A worker processes nickel at a nickel smelter near Sorowako, Indonesia's Sulawesi island, in this January 8, 2014. REUTERS/Yusuf Ahmad

    TEMPO.CO, Jakarta - Raden Sukhyar, chairman of the Indonesian Smelter and Mineral Processing Association, said electricity is the main obstacle that miners are facing in building smelters.

    According to Raden, employers are forced to build power generators in order to build the smelters, because they are not provided by the government. This forces companies to spend more money in the process.

    "US$1 billion should have been enough, but because we have to set up generators, we have to spend US$ 2 billion," he said on Sunday, September 25.

    Sourcing the funds to construct the power plants takes time. Eventually, the time to build the smelter becomes longer, which is why there are many businesses that have not finished their smelter projects.

    According to the Energy and Mineral Resources Energy, per September 2016 there were 64 smelters being built by 84 mining license holders.

    These smelters are being constructed by nickel miners (34 units), Bauxite miners (7 units), copper miners (five units), and zircon miners (11 units). Meanwhile, manganese, lead, zinc, kaolin and zeolite miners are building two smelters each.

    Ten out of these 64 smelters have only made less than 10 percent progress. Meanwhile, only 14 smelters had reached the ground-breaking and early construction phases with a progress of 10-30 percent.

    To encourage smelter development, Raden asks the government to help smaller businesses that are having difficulties in financing their smelter projects.

    VINDRY FLORENTIN